New Property Tax System - FAQ
The following is a list of frequently asked questions about the new Property Tax System.
Click on a subject heading below to view questions and answers related to your selection. You may also click a particular question to go directly to its answer.
- What is the new rate of the final withholding tax on property and from when is it effective?
- Are there any exceptions?
- How will the new final withholding tax system apply in the case of property transferred on or after 1st January, 2015 where a notice of a promise of sale or transfer relating to that property had been given to the Commissioner before the 17th November, 2014?
- If a promise of sale or transfer relating to a property that forms part of a project or of property situated within a special designated area given to the Commissioner before the 17th November, 2014 is cancelled after this date or expires, and such transfer would have been subject to 12% final withholding tax if the transfer was made before the 1st January 2015, will an eventual transfer be taxed under the new system if made on or after the 1st January 2015 i.e. at a lower rate of 8% or 10%?
- Will it be possible to elect to exclude a transfer property from the scope of the final withholding tax system on or after the 1st January 2015?
- What happens in the case of transfers made on or after the 1st January, 2015 of property that forms part of a project or of property situated within a special designated area?
- Where a transfer of property is made by a person who is not resident in Malta and who is resident for tax purposes in another country, such person may currently opt out of the 12% final withholding tax system. Will this remain the same under the new system?
- Are there any circumstances where an election may still be made to exclude the transfer from final withholding tax system and elect to be taxed on the profit or gain?
- Do the exemptions prescribed under article 5A(4) of the Income Tax Act still apply?
- What happens if in the period of ownership of my residence there is a change in the dwelling house?
- If I have a garden or a garage does it also form part as my own residence for the purpose of the exemption?
- Which date is to be taken as the date of acquisition where the transferor is a company that had acquired the property by means of a transfer that qualified for the intra-group exemption?
- How am I taxed if I inherited the property after the 24th November, 1992?
- How am I taxed if the property was inherited before the 25th November 1992?
- How am I taxed if I acquired the property by donation?
- How am I taxed if I sell the property on or after the 1st January, 2015 in the circumstances referred to in article 31C(1) of the Income Tax Act?
- How am I taxed in the case of an assignment of a right obtained in terms of a promise of sale (konvenju)?
- Can I deduct brokerage fees from the value of the property transferred, before applying the final withholding tax?
- What happens in the case of transfers made on or after the 1st January, 2015 of property that forms part of a project or of property situated within a special designated area in the case where no units forming part of the project have been transferred by the 31st December 2014 but a notice of promise of sale has been registered before the 17th November, 2014?